Shares of top credit card-issuing companies rose Wednesday despite less-than-stellar consumer credit data from the Federal Reserve.
The central bank reported that consumer credit rose at a 3% annual rate in December, with borrowings totaling $2.4 trillion. By comparison consumer debt had grown at a 6.9% annual rate a month earlier.
A key reason for the slump in consumer borrowing came from slower growth in revolving debt, which largely consists of credit card balances.
Revolving debt rose at a slim 0.8% annual rate in December, to $876. 2 billion. It had grown at a 13.8% annual rate in November.
Nonrevolving debt, which includes auto loans, rose at a 4.3% rate in December, to $1.52 trillion. These loans had increased at a 2.9% rate a month earlier.
Shares of Capital One Financial Corp. in McLean, Va., climbed 1.1%, and American Express Co. in New York also gained 1.1%. The stock of two big credit card banks, Bank of America Corp. in Charlotte, up 0.3%, and JPMorgan Chase & Co. in New York, up 0.4%, showed small gains.
More broadly, the American Banker index of 225 banking companies rose 0.55% Wednesday; the thrift index was up 0.15%; the Standard & Poor's 500 rose 0.14%; and the Dow Jones industrial average gained 0.56%.
New York Mortgage Trust Inc. shares rose 13.7% after the company said it had agreed to sell its retail mortgage banking business to IndyMac Bancorp Inc. in a $13.4 million deal expected to close next month. The New York real estate investment trust said in a press release that the sale was prompted by "significant challenges facing the mortgage industry."
Shares of IndyMac, a Pasadena, Calif., thrift, fell 0.2%.
M&T Bank Corp. shares rose 0.6% after the Buffalo company said in a regulatory filing that it had bought a minority stake in Bayview Lending Group LLC, a privately held Coral Gables, Fla., commercial real estate lender. Documents issued by the Fed last month indicated that M&T had bought a 20% stake and that Bayview has operations in the United States, Canada, and the United Kingdom. M&T did not disclose what it paid.
NetBank Inc. shares fell 2.9% after the Alpharetta, Ga., thrift company said in a regulatory filing late Tuesday that it expects its fourth-quarter earnings to be "well below" the after-tax loss of 74 cents to 87 cents a share that it forecast in December. It attributed the worsening to additional nonconforming repurchase provisions, the creation of a deferred-tax asset, and a risk-based capital level that is below 10%. It also expects a $9.7 million noncash, pretax impairment charge.
Gainers included the Lincoln, Neb., student lender Nelnet Inc., up 5%; Suffolk Bancorp in Riverhead, N.Y., 3.9%; and Glacier Bancorp Inc. in Kalispell, Mont., 3.6%.
Decliners included San Juan, Puerto Rico's Doral Bancorp Inc. and W Holding Co. Inc., off 2.9% and 2.7%, respectively, and Nara Bancorp Inc. in Los Angeles, 1.9%.